On 22 November 2018, HM Treasury published a number of explanatory information webpages for draft EU Exit statutory instruments (SIs) yet to be published:
- explanatory information for The Mortgage Credit (Amendment) (EU Exit) Regulations 2019. These Regulations address deficiencies in the Mortgage Credit Directive Order 2015 that arise as a result of the UK leaving the EU, and makes consequential amendments in line with other EU Exit SIs that the UK Government is making, so that mortgage regulation continues to operate effectively in a no-deal scenario
- explanatory information for The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019. These Regulations amend the Financial Services and Markets Act 2000 (FSMA) and related domestic legislation in order to ensure that the UK’s financial services framework continues to operate effectively in a scenario where the UK leaves the EU without a Withdrawal Agreement;
- explanatory information for the Official Listing of Securities, Prospectus and Transparency (Amendment) (EU Exit) Regulations 2019. The draft SI addresses deficiencies in the EU Prospectus Directive and Transparency Directive to the extent that they are retained EU law on Brexit. It ensures that the prospectus regime will be applicable to issuers making an offer to the public in the UK or applying to admit securities to a regulated market in the UK, and the transparency framework will be applicable to issuers with securities traded on regulated markets in the UK, and will continue to operate effectively in a UK-only context. The official listing regime, applicable to firms seeking, or having secured, admission of their securities to the Official List of the FCA, will also meet this objective;
- explanatory information for The Investment Exchanges, Clearing Houses and Central Securities Depositories (Amendment) (EU Exit) Regulations 2018. The draft SI amends relevant parts (Part 18, 18A and Schedule 17A) of FSMA that outline the regulatory regime for recognised investment exchanges, EEA market operators, clearing houses (including central counterparties and central securities depositories (CSDs), operating in, or (in the case of certain CSDs) offering services to, the UK. The draft SI will ensure that the policies continue to operate effectively following Brexit;
- explanatory information for the onshoring of the E-Commerce Directive (ECD). In the financial services sector, the ECD allows EEA Member State firms, excluding Solvency II insurers, to undertake regulated activities in online only financial services in the UK without needing UK authorisation, or being subject to UK regulation. Post-Brexit, the ECD will no longer apply in the UK. Therefore, EEA firms undertaking regulated financial services activities in the UK delivered solely over the internet will no longer be able to use the exclusion set out in the ECD, which allows them to undertake regulated activities with virtually no UK regulation applying to them. Certain provisions will thus be revoked to reflect this change and will be set out in an SI at a later date; and
- explanatory information for the Market Abuse (Amendment) (EU Exit) Regulations 2018. The Market Abuse Regulation (MAR) aims to increase market integrity and investor protection, enhancing the attractiveness of securities markets for capital raising. The draft SI will address deficiencies in the MAR as retained EU law to ensure it continues to operate effectively following the UK’s withdrawal from the EU. Notably, UK MAR will capture conduct related to instruments admitted to trading or traded on both UK and EU trading venues.
The draft SIs accompanying these explanatory information webpages can be expected to be published in the coming weeks.